9911796707
TMI Blog2019 (6) TMI 994X X X X Extracts X X X X X X X X Extracts X X X X ..... . As per the CIT(A) there is no material or evidence to say that the assessee was connected with the bank accounts in question so as to justify an inference that any income thereof was received or deemed to have been received or accrued or deemed to have accrued in India. A perusal of the Grounds of appeal raised by the Revenue before us reveal that none of the findings recorded by the CIT(A) have been assailed on the basis of any material or evidence. In fact, the entire case of the Revenue, which had been adverted to at the time of hearing before us, is based on the presumption that the assessee has routed the money sourced from India through the three entities into the bank accounts in question. It is a well-settled proposition that a presumption, howsoever, strong cannot substitute an evidence and, therefore, in our view, the CIT(A) made no mistake in deleting the addition. What is required is to weigh and consider all evidences and material which are available on record. Considering the facts of the instant case and noting that there was complete absence of material, as noted by the CIT(A) too, we find that the application of test of human probabilities to sustain the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt prays that the order of the Ld. CIT(A) on the above ground(s) be set aside and that of the Assessing Officer be restored. 3. A perusal of the aforestated Grounds reveal that the solitary dispute emanates from the order of the CIT(A) in deleting an addition of ₹ 3,65,85,330/-, which was made by the Assessing Officer with respect to certain bank accounts stated to be connected with the assessee. In this background, both parties have been heard and relevant material perused. 3. Briefly put, relevant facts are that the respondent assessee is an individual, who is a Non-Resident Indian. The impugned proceedings were initiated by the Assessing Officer in terms of section 148 of the Act, based on certain information received by the Government of India from the French Government under the Double Tax Avoidance Agreement (DTAA). The information was that various individuals have foreign bank accounts in HSBC Private Bank (Suisse) SA, which were not disclosed to the Indian tax authorities. The assessment order records that such information was received in the form of a document, which has been referred to as Base Note . It is further stated that su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Zeke Limited opened their account in the same branch of HSBC in which CBAY systems held its account, finding a common link in the three entities, the latter two entities also got tagged with the assessee s name since he was the Director in the two entities. Explaining the entire factual matrix, the assertion of the assessee before the Assessing Officer was that Zetec Ventures Ltd and Zeke Limited were distinct legal entities and clients of HSBC Private Bank (Suisse) SA and that there was no link between the assessee and the two entities in so far as the transactions in the bank account of the two were concerned. In fact, the Assessing Officer has recorded the submissions of the assessee to the effect that the assessee was not handling any transactions of said companies. 4. On the other hand, the Assessing Officer required the assessee to provide the statements of the bank accounts in question, the consent waiver form and also the source of deposits made in such accounts along with the supporting evidence. Noting the resistance on the part of the assessee to furnish such material, the Assessing Officer held that the same leads to the presumption th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have carefully seen the facts of the case and submission made by the assessee. Here the assessing officer has asked the assessee to prove that the amount reflected in the HSBC account Geneva was not sourced from India. The assessee has repeatedly submitted he did not have any access to bank account and therefore he could not have submitted and whatever bank account he held in India, he disclosed in the Return of Income. In these circumstances, it cannot be presumed that the amount in the HSBC account belonged to the Assessee without any evidence or even corroborate evidence to that effect therefore, I am unable to subscribe to the action of the AO that the account and the peak amount in question belonged to the appellant or for that matter it was the undisclosed income of the appellant. Thus, considering the facts I am inclined to accept the arguments of the appellant. Thus, considering the facts I am inclined to accept the arguments of the appellant that the AO has made such addition merely by conjecture and surmises. It is well settled that suspicion howsoever strong it may be cannot take the position of proof and no addition could be made on such presumption and assumption. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respondent but referred to the discussion made by the AO in support of the case of the Revenue. In particular, the CIT-DR has referred to the discussion made by the AO in para 7.2 of the order to point out that the assessee was not forthcoming in producing the bank account statements or consent waiver form that could have enabled the AO to obtain the relevant details with regard to the bank account in question . In this manner, the learned CIT-DR submitted that the AO had correctly invoked the presumption that money sourced from India was routed through three entities to the bank account in question and, therefore, addition was rightly made. The learned CIT-DR also referred to the findings of the AO that assessee was an Indian citizen who had financial interest in India and that on the basis of preponderance of human probabilities, the three bank accounts in question could be beneficially attributable to the assessee. In this manner, the addition is sought to be defended. 11. On the other hand, learned representative for the assessee pointed out to various factual assertions made by the assessee before the lower authorities and also relied upon the findings of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) of the Act. In fact, such a situation has been examined by our co-ordinate Bench in the case of Shri Hemant Mansukhlal Pandya (supra). The bare provisions of section 5(2) of the Act bring out that in case of a non-resident assessee, the total income that is liable to be taxed shall comprise of income, which is received or deemed to be received by or on behalf of such person or the same accrues or arises or is deemed to accrue or arise in India to such person. Therefore, the moot question is whether it can be said that the credits appearing the three bank accounts in question lead to the situation where the amount is includible in the income of the assessee, a nonresident Indian, within the provisions of section 5(2) of the Act. For this purpose, what is relevant to decide is the burden on the assessee to disclose the details of the three bank accounts in question. This aspect was also gone into by our coordinate Bench in the case of Shri Hemant Mansukhlal Pandya (supra), and the following discussion is relevant:- 17. Having said, let us examine, non residents are required to furnish details of his foreign bank accounts and assets in India or not. The assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was on the Department to prove that the particular asset in question was within the taxing provisions of the Indian Income Tax Act, 1961. The proposition has been arrived at, relying on the judgment of the Hon ble Supreme Court in the case of Parimisetty Seetharaman vs. CIT [57 ITR 532]. Therefore, we proceed further on the premise that the onus was on the AO to establish that qua the three bank accounts in question assessee had the ownership and also the fact that the transactions therein have Indian connection. 14. In this background, we have examined the factual findings which have been arrived at by the CIT(A). In the earlier part of this order, a portion of the said finding has also been extracted by us. As per the CIT(A) there is no material or evidence to say that the assessee was connected with the bank accounts in question so as to justify an inference that any income thereof was received or deemed to have been received or accrued or deemed to have accrued in India. A perusal of the Grounds of appeal raised by the Revenue before us reveal that none of the findings recorded by the CIT(A) have been assailed on the basis of any material or evidence. In fact, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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